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Rolex SA (Société Anonyme, meaning “anonymous company” in French) is a private
company and the single largest luxury watch brand in the world. They manufacture,
distribute and service wristwatches. In 1905 in London, Hans Wilsdorf and Alfred
Davis founded Wilsdorf & Davis, which eventually became “Rolex,” and was registered
as a trademark in 1908 and as a company in 1915. Rolex moved to Geneva, Switzerland
in 1919. They are responsible for many innovations in the watch industry including
the first self-winding watch, the first waterproof case, the first watch with a date on
the dial, the first watch to show two time zones at the same time and the first brand
to earn the chronometer certification for a wristwatch.
While Rolex has consistently sold to an upper class target market that consists of
mainly men over the age of 35, there is an untapped market that needs to be addressed.
This marketing plan will look at the current target market as well as the new market
that will be covered. A situational analysis will be conducted including an evaluation
of the strengths, weaknesses, opportunities and threats of the company. A proposal
for a new marketing strategy will be introduced, including a plan of action and a
financial forecast for the future.
In order to continue their dominance of the luxury wristwatch industry, Rolex must
look at the younger generation and find a way to convince them that the product is a
necessary purchase. This report describes how the company will approach this issue.
Rolex is a strong brand with a long history of high-quality luxury watches that are
the ultimate aspiration of the consumer. A Rolex is a status symbol known throughout
the world. They have 28 affiliates worldwide and rely on 4,000 watchmakers in over
100 countries, which gives them a prominent global presence.
The weaknesses include the price point, which only the affluent can afford. Another
problem is that the current younger generation has grown up with cell phones,
which they use to tell time. In the past, a watch was more valued, but for kids today,
the cell phone often replaces the watch. Finally, Rolex also produces a high-volume of
watches, which is a problem with watch aficionados who often prefer to be “unique”
and own pieces that few others own.
The opportunities for Rolex include the development of an effective social media
campaign. For example, Rolex has a website with a YouTube channel link, but does
not have links to other social media sites. These accounts would allow Rolex to have
an open dialogue with their customers as well as potential customers. There are
many Rolex fans and knockoff companies that have created pages, but there are no
verified “official” Facebook or Twitter pages, for example. Another great opportunity for
the brand is to educate the younger market so they understand the value of watches
and buy upstream later in life. Rolex can also continue to come up with more limited
editions of their watches that would create more individuality.
One of the biggest threats to the company is the current recession. People are
spending less money on “frivolous” purchases and high-end watches are certainly
not a necessity. Another great threat is the wide variety of counterfeit products that
are in the market. There are many manufacturers, especially in China, that produce
knock-off Rolex watches that look and feel like the real thing. An additional factor is
that Rolex produces about 2,000 watches a day and that is the highest volume in the
luxury watch industry. The higher the volume produced can equal a lower quality.
Other high-end watch companies are also a threat, including Omega, Cartier, Roger
Dubuis and Patek Philippe.
Strengths, Weaknesses, Opportunities and Threats
MISSION, VISION, OBJECTIVES
To manufacture, distribute and service high-quality wristwatches.
To continue the long tradition of excellence that the Rolex name represents.
• Educate the younger market on the value of wristwatches.
• Create a social media strategy that will encourage users to interact with the
brand as well as extend the message to a larger audience.
• Promote the purchase of wrist watches as a “reward” for key successes in a
young man’s life.
Current Market: The current target market for Rolex is wealthy consumers that
are looking for high quality and exclusivity. The products are created for those who
want to show off their wealth. The typical Rolex owner is male and above the age of
35, sometimes a celebrity or sports figure. Rolex is an international brand of Swiss
watches that is valued all over the world with over 50% of the market residing in the
US, Hong Kong, China, France and Singapore.
Market Segment: 21 to 35 year old males living in the United States who have recently
landed a high-paying job, earned a promotion or received a bonus. These are young
men who want to show off their newfound status. They have bought their expensive
suits and shoes to wear to their job, but they need to complete the look with the
sophistication of a Rolex watch to show that they have “made it.” This target market
currently values cell phones as their primary way to tell time and they do not yet
appreciate the value of a watch. They need to be educated on why they should be
wearing a watch as opposed to checking their cell phones for the time. Watch sales
have dropped considerably by as much as 30% in the past several years among
young men. This is a market that needs to be shown how owning a watch is a sustainable
competitive advantage. This group is highly active on the internet and is influenced
by advertising and their friends’ postings on Facebook, Twitter and YouTube.
Secondary Market Segment: Parents and grandparents of 18-24 year olds who are
rewarding their son or grandson for graduating from high school or college or even
obtaining a new job. These are 40+ year old men and women making above $65,000
per person per year. They are sophisticated and know the value of a high-quality
timepiece and are passing that knowledge onto their son/grandson. After receiving
a Rolex watch as a gift, the young man will see the value of the watch and purchase
more from the brand in the future.
• High-end luxury brand that is the ultimate aspiration of the consumer.
• Fashionable alternative to using a cell phone to tell time.
• Status symbol.
Magazine Advertisements- Rolex will place ads in men’s magazines such as Maxim
and GQ. Ads will cater to the target market and attempt to educate them on the
value of wristwatches as rewards and alternatives to cell phones to tell time.
Billboards- Ads will be placed on billboards in major cities, mainly in affluent areas
to hit the target market. Both traditional and digital billboards will be utilized.
Ads at sporting events- Ads will be strategically placed at sporting events that
young men attend including, but not limited to, basketball, football and hockey
Sponsorship of music concerts- Rolex will sponsor concerts that are popular with
the target market. Ads will be placed throughout the concert venues as well as in
the programs. The logo and name will be included all over the concerts promotional
Website- A section of Rolex.com will be developed that caters to the target market
and conveys the benefits and value of wristwatches.
• The website will include links that are prominently displayed on the homepage
including Twitter, Facebook and YouTube. The user can then easily connect with
Rolex’s social media sites with one simple click.
Twitter- An official Rolex account will be created and verified. This account will be
managed by a social media team that will tweet daily to educate the audience as
well as respond to comments and concerns of their followers.
Facebook- An official Rolex page will be created and monitored by a social media
team. Information will be updated on a regular basis and the team will interact with
YouTube- An official YouTube channel will be established and include videos and
advertisements that cater to the target market. Each week there will be a new video
that educates users on different features of Rolex watches.
This timeline covers the launch of traditional media, online media and social media.
The advertising agency will work with the marketing team on the new look and
feel between April and July of 2013. The new campaign will be rolled out in the fall
(September/October 2013). The second phase will take place in spring (March/April
2014), just before high school/college graduation.
New creative will be developed for the campaign advertisements and billboards
starting in April 2013. The creative team at the advertising agency will have 3
months to come up with the final direction as approved by marketing and the media
will rollout as follows:
Magazine/Billboard advertisements will run starting October 2013. The second
phase will run in March 2014.
Ads at sporting events will run starting October 2013 or later depending upon contracts
and choices of events.
Sponsorship of music concerts- research will begin in April 2013 involving the
choice of concerts and partnerships should be in place by October 2013 in order to
feature the new creative look.
After the creative direction has been chosen from the advertising agency, the look
and feel will be developed into a section of the current website that is cohesive with
the Rolex brand.
• The website addition will be implemented in September 2013, concurrently with
the introduction of the new advertisements. The second promotional phase will be
implemented in March 2014.
Twitter/Facebook- The new accounts will debut in August 2013 in order to create
buzz and prepare for the new campaign.
YouTube- The official channel will debut in August 2013 with a preview/teaser of
what will be coming soon from the brand. Small elements of the new campaign will
be revealed weekly until the full introduction in October. In March 2014, previews of
the second campaign will be revealed weekly and fully introduced by April.
• Increase daily production by 10%. (An extra 200 watches per day on top of the
2,000 that are already being produced.)
• Increase sales profit percentage to more than the percentage of population
growth per year.
• New Marketing: Marketing team, financial team, sales teams, public relations,
social media team, web development, advertising, event production.
• Cost of Goods Sold: Watch materials, shipping, packing, quality control.
This marketing plan summarizes the main points of how Rolex will market their
wristwatches to a younger generation than the current target market. This expansion
will allow Rolex to move into an untapped area that needs education on the value of
a high-quality time piece. In order to properly address this objective, Rolex needs
to update their marketing strategy to include a greater presence in advertisements
that target this younger market as well as a strong showing in the social media realm.
Rolex has a long tradition of creating the standard for luxury in wristwatches. By
adding a new segment of the population to their customer base, they will ensure
that they continue their standard of excellence. Moving forward as technology
evolves is key in achieving this goal.